Council firms face axe in a bid to stop milking the cash cows

Published on Friday 24 October 2008 10:17

THE number of arms-length firms owned by the city council faces being cut back in the wake of allegations of public money being wasted.

Waterfront Edinburgh Limited came under fire last year after the Evening News revealed that 10,000 of public cash had been spent on exercise equipment for board members.

Concerns were also raised about thousands of pounds in expenses being claimed for trips to Boston, Cannes and Six Nations rugby matches.

Now the council is considering merging some of the firms and introducing closer monitoring.

Following a review of the operation of the arms-length companies, council officials are also likely to be removed from their boards and given enhanced "observer status".

Business experts from the private sector may also be appointed to the boards, while in-depth reviews of each company could be carried out every three months.

The overhaul was ordered by city leader Jenny Dawe and mainly focuses on the council's development firms, including EDI, Edinburgh Park owners New Edinburgh Limited, Waterfront Edinburgh, PARC – the body behind Craigmillar's regeneration – and Shawfair Developments Limited.

Edinburgh International Conference Centre Limited and the overarching body CEC Holdings were also included.

Economic development leader councillor Tom Buchanan said: "In the current economic climate, we must ensure that our arms-length companies are operating to optimum efficiency. This review will ensure that we establish the best business model and governance procedures to move forward."

There is an expectation that any mergers would also bring efficiency savings.

The moves follow concerns about a lack of scrutiny of the arms-length firms' operations.

As well as the Waterfront Edinburgh spending, there was anger among administration councillors who said they were kept in the dark when retired education chief Roy Jobson was given a senior post with EDI, the council's development firm.

Labour's city finance spokesman councillor Ian Murray said his colleague councillor Elizabeth Maginnis, who died last month, had been pushing for changes.

"There's a plethora of different bodies which are all independent of the council," he said.

"Elizabeth was always of the view that we should get these working together. From a financial perspective, it's an opportunity to get companies working jointly on projects.

"For example, following the collapse of (Granton developer] Gregor Shore, Waterfront Edinburgh and EDI could look at purchasing the site and building affordable housing."